Sharri Markson: What if a complex IR system, not Calombaris, is the real issue
It’s very possible the vilification of chef George Calombaris is unjustified and even wrong. That his underpayment of staff was not deliberate, but the story of a small Aussie company that grew, employed people, and spent enormous amounts of money trying to comply with complex laws but failed, writes Sharri Markson.
Opinion
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George Calombaris has been vilified as a modern day slave-master, exploiting his empire of hardworking waiters and cooks.
The caricature is of an evil boss flicking his workers pennies while he was living in mansions, hamming it up on television and taking the glory in the spotlight.
But it’s very possible the vilification of Calombaris is unjustified and even wrong. It’s possible his underpayment of staff was not deliberate, and the real picture is of an Australian who grew a company, gave work to hundreds and spent enormous amounts of money trying to comply with the law and pay the correct wages.
His case is likely the result of an overly-complex awards system that is close to impossible for any company with any complexity to comply with.
Calombaris is a standout example because he is a big name behind his empire.
But let’s look at the multitude of other organisations which have now been shamed publicly for underpaying staff: Qantas, the ABC, Westfarmers, Woolworths, Super Retail Group that owns Rebel Sport and Supercheap Auto, Commonwealth Bank, Michael Hill jewellers, Sunglass Hut, Bunnings, Rockpool Dining Group, Subway, Endota Spa, Coffee Club, Foodco, Crust Pizza, Sushi Bay and the list goes on.
Are we seriously saying that the likes of ABC and Qantas were deliberately exploiting their workers?
Of course not. There are some rare cases where bosses deliberately underpay their workers to boost profits — and in these instances, it needs to be exposed and splashed across the front pages coupled with criminal penalties.
But this is likely not the case the majority of the time.
Instead, it’s successive federal governments that should be held to account for their pathetic lack of courage or will to sort out our basket case of an awards system.
To take it to basics: To work out what to pay staff, businesses need to consider 122 awards, plus any enterprise agreements, and determine which ones apply to you.
Each of the awards can run for 50 or 60 or 70 pages — all filled with incredibly complex information and classifications. For example, the Banking and Finance Award states that a worker should be classified as level 3 if they are involved in “drafting routine correspondence’’.
This could potentially cover anyone who uses email.
Even to work out the hourly pay of a carpenter, you need to apply a dozen different “allowances” and the order in which the formula is applied can mean the rate is calculated incorrectly.
On top of that, a business with just 20 staff could have five different award systems to deal with, while a large company with thousands of staff would have its employees covered under multiple awards — all subject to change at a moment’s notice.
Companies need large legal teams and specialised firms, at extraordinary cost, to work out what they should pay their staff.
Even with all of these teams of experts businesses are failing because our system is just too complex. Companies end up overpaying or underpaying.
Fair Work Australia is said to be backed up, potentially for years, with cases of underpayment where companies have self-reported. Their phone-lines are virtually non-operational; a recorded message says they are experiencing a high-volume of calls and to try again later.
Companies are drowning — all the while trying to do business in a difficult economic environment. It’s no wonder there is a general reluctance to hire more employees than is necessary.
The Australian’s economics editor, Adam Creighton, said there is a direct link between the unemployment rate and our arduous Industrial Relations system.
“Compared to other countries around the world, Australia’s industrial system is one of the most complicated,” he said.
“Australia’s unemployment rate is so much higher than the UK or US, one of the reasons is because the industrial system is so complicated it makes it difficult to hire people.”
So, what is the federal government doing about all of this?
Attorney-General Christian Porter said this week he wants to publicly name and shame companies who do the wrong thing, saying underpayments were now “endemic”.
In the same breath, he admitted most companies do not deliberately underpay but complained “it’s still utterly hopeless’’.
You know what’s utterly hopeless?
The fact Porter is not prepared to embark on meaningful reform to make it easy for companies to pay their staff fair wages. This is what companies are spending vast sums of money trying, and failing, to do.
Industrial relations expert and columnist Katrina Grace Kelly said the issue of underpayments “is absolutely the government’s fault’’.
“Some awards are clear-cut like a nurse in a hospital but there are many businesses where it’s not clear which award you should pay under,” she said.
“You ring Fair Work and they will say it could be this or that award but we don’t give binding advice, you need to go and get legal advice.
“Then, that’s just a lawyer’s opinion and they are wrong 50 per cent of the time. So you can go on for years thinking you’re doing the right thing and then an employee can go to Fair Work and say they’ve been underpaid.
“One easy way to help is for Fair Work to give binding advice, written advice to companies, to say this is the award you’re supposed to pay under and provided you follow this you’ll never be in trouble.”
By embarking on genuine reform and reducing the cost of compliance, companies would have major cost-savings which could enable them to pay their workers even more and hire more staff. This is an opportunity for the Morrison government to embark on real economic reform that we have not seen since the last great prime ministers — Hawke, Keating and Howard.
But Prime Minister Scott Morrison has loaded Porter up with too many complicated policy areas. Industrial Relations reform is too vast for one minister who is also examining religious discrimination, intelligence and media laws and is the Leader of Government Business in the House.
And it’s crucial reform. The current awards system lets down both companies and workers.
In an increasingly globalised world where Australian companies are competing internationally for business, taking meaningful industrial relations reform has never been more important.
The government needs to rip the band-aid off and tackle industrial relations because our current system is strangling business and the economy is struggling.